Category: News & Market Reports

Berkadia Arranges Sale of New Luxury Multifamily Community in Katy

Posted on by Sarah

Berkadia announces it has arranged the sale of Boardwalk Lofts, a 319-unit multifamily community in Katy, Texas. Managing Director Jeffrey Skipworth, Director Kyle Whitney, Managing Directors Joey Rippel and Chris Young and Senior Managing Directors Chris Curry and Todd Marix of Berkadia Houston represented the seller, an affiliate of Sueba USA Companies, a real estate development company based in Houston, Texas.

Built in 2021 and located at 122 Lakeview, Boardwalk Lofts offers one-, two- and three-bedroom units ranging from 520 square feet to 1,914 square feet. Individual units feature chef-inspired kitchens with under-mount sinks, stainless steel appliances, kitchen cabinets with brushed nickel hardware, custom granite countertops, bathrooms with custom framed mirrors, oversized soaking tubs with walk-in showers, designer tile and wood-style flooring throughout, patios and balconies. Community amenities include a leisure pool and lap pool, a summer kitchen with gas grills, a business conference center, 24-hour fitness center, a coffee bar, walk and biking trails and valet trash service.

Situated in Katy, Boardwalk Lofts has convenient access to the newly expanded Grand Parkway, the University of Houston Katy campus, Boardwalk Crossing, George Bush Park and Katy Mills. It is 30 minutes from Downtown Houston and only one hour away from the William P. Hobby Airport.

Oak Ridge North, Developers Plan for 7.7-acre Project to Include Retail Center on Robinson Road

Posted on by Sarah

A business park with industrial, office and retail offerings is under discussion for Robinson Road in Oak Ridge North’s extraterritorial jurisdiction as part of the city’s ongoing economic development.

At the April 11 meeting of the City Council, Nate Newman of Newman Development Corp. discussed recent progress toward a development agreement with the city for Woodlands Ridge Business Park, which would require a public utility expansion. City officials said in meeting materials there was adequate supply for water and sewer to be extended to the proposed complex.

According to city materials, the process began in May 2019 when Newman requested a predevelopment meeting regarding a future development in the city’s extraterritorial jurisdiction as well as potential annexation into the city.

On April 11, Newman said the development company agreed to the several requests the city had previously made for the project, including upgrading its plans for a facade as well as incorporating a retail center as part of its plan. Click to read more at www.communityimpact.com.

Rate Volatility Triggers Refi Opportunities: Plenty of Financial Incentives to Refinance Ahead of Maturity Dates

Posted on by Sarah

On the heels of the long-anticipated Fed rate hike in mid-March – its first since 2018 –cost of capital is top-of-mind for real estate owners.

Capital markets have changed dramatically during the past two months because of rising rates and wider spreads created by external market forces. The 10-year treasury has climbed more than 1% since Sept. 1, 2021, and about 75 basis points in 2022 alone.

In addition to its quarter-point rate increase, the Federal Open Market Committee has signaled that the Fed will likely raise rates up to six more times this year and up to four times in 2023. Although that context is important, rate moves are never a sure thing. Frankly, no one has that crystal ball to say whether rates will move higher when they could just as easily drop 30 or 40 basis points tomorrow.

One of the certainties of the current volatile environment is that now is an ideal time to review your portfolio and look at loans that might be maturing within the next three to four years, to see whether it makes sense to refinance. That analysis takes into consideration key factors – the ability to lock in a new low rate and pull cash out, while also weighing pre-payment premiums to determine how much an owner might save over the life of a new loan.

For example, Northmarq recently conducted a loan portfolio analysis for a client on eight different properties (self-storage and apartment). The analysis took a comprehensive look at pre-payments, current payments, future payments and cash-out ability across different lender and loan product options.

In this case, the pre-payment was a fixed 1% for the next three years. The client believes that rates are going up and recently moved forward with the the refinance of the first loan on a self-storage asset. The client was able to lock in the rate in the low-3% range on an IO loan, pull out several million dollars in equity and reduce the loan payment by $3,000 a month.

That is a bit of a best-case scenario with a “trifecta” of incentives to refinance now. However, if the owner had not done the analysis, it would not have been aware of the opportunity. If you believe rates could substantially increase in the future, the cost to refinance early could easily be less than a higher-rate loan in the future.

It is important to note, that, comparatively speaking, we are still in a period of historically low rates. The 10-year treasury historic low occurred on Aug. 4, 2020, at 0.52%, while the 10-year treasury high occurred on Sept. 30, 1981, at 15.84%. The historical average for the 10-year treasury since 1962 is 5.94% (with a median rate of 5.73%). The 10-year treasury today is above 2.40%.

Despite rate volatility and speculation that rates could move higher, borrowers can still find attractive financing rates and lock in low rates for the next 10 or 20 years. Although lenders are shying away from risk, they are willing to lend on all property types, including stepping back into retail, office and, in some cases, hospitality.

Borrowers will benefit from life insurance company loans that offer early rate locks (at term sheet or loan application), which the lender can hold for three to six months at no additional premium. Some lenders are willing to hold a rate even longer, for nine to 12 months, which delivers the added benefit of reducing any prepayment penalty. Holding that rate for a longer period does come with a slight premium, 2 to 5 basis points per month past three or four months. However, the upside is that it may allow you to reduce your prepayment penalty and provides the added benefit of holding your rate in a rising rate environment.

Another incentive fueling refi opportunities is the strong value appreciation that many property owners have experienced. Property cash flow and values have increased significantly during the last five to 10 years. However, if an owner decides to sell an asset to realize gains, it creates a question of what to do with the sale proceeds. Can you reinvest in today’s competitive marketplace and successfully complete a 1031 exchange, or could you potentially face a tax on the gain? A big advantage of a cash-out on a refi is that those proceeds are tax-free, and you also continue to generate cash flow from the property.

Oftentimes, borrowers put long-term, fixed-rate debt on a property and forget about it until that loan is about to expire. That is even more true in what has been a long-running period of historically low interest rates. Now that the rate environment is starting to shift, it is a good time to conduct a financial analysis of loans with maturities through 2025 to determine if there are any opportunities to refinance.

Granite Redevelopment Properties Partners with The Solar Company to Bring the Nation’s Largest Multifamily Solar Panel Installation Project to North Texas

Posted on by Sarah

Granite Redevelopment Properties, LP has enlisted The Solar Company to complete the largest multifamily solar panel installation project in the U.S. to date. At 16 of Granite’s apartment communities in Dallas and Tarrant counties, the company is installing solar panels to generate electricity and offset energy costs at its Class-B and C communities, comprising more than 3,600 units. Additionally, solar carports – parking spots with solar panel roofs – at nine properties will provide protection from the elements for 2,000 parking spaces while generating power.

The Solar Company designed and installed the 15-megawatt, 40,000-panel system to maximize sun exposure, allowing the apartment communities to meet their energy needs as well as protecting costs associated with Texas’ rapidly-rising utility rates. Expected project completion is July 2022.

“Granite is setting a trend for owners of Class B and C apartments – and potentially the entire multifamily industry. By removing one of the biggest expenses for many landlords with rooftop solar panels and solar carports, the math is hard to argue with,” said Travis Wildeman, CEO of The Solar Company.

By partnering with The Solar Company, Granite is able to take full advantage of federal tax credits and additional incentives available to them. The exact terms of the deal are undisclosed.

Lancaster Remains Top Choice for New Manufacturing Space in Dallas County

Posted on by Sarah

Lancaster continues to be the premier choice for new manufacturing and fulfillment space in Dallas County. The community has more than doubled its stock of industrial and distribution space between 2016 and 2021, adding 6.9 million square feet of new space. A total of approximately 7.8 million square feet of additional space is under construction or far along in the planning process, most of which is expected to be online by 2025.

The growth in Lancaster’s industrial real estate market is the result of both a strong leasing environment and build-to-suit construction for national and international companies like Walmart, DSV Logistics, Niagara Bottling and McKinley Packaging. Construction of spec buildings is continuing with Oakmont’s recent completion of a 600,000-square-foot facility, and new construction is starting for a few projects by White Tract that are expected to add more than 1.5 million square feet of industrial space. The vacancy rate for industrial property dropped from close to 25% in 2017 to close to 5% today.

Lancaster is also well positioned to attract additional manufacturing companies. Approximately 3,000 acres of prime industrial land is available and fully served by utilities and proximate to the Union Pacific Dallas Intermodal Facility, I-45, I-20 and I-35E. High-capacity electric lines are adjacent to many of these sites, and Atmos has completed a superior gas service for the area. Besides this, Lancaster has enough water and wastewater capacity available to attract manufacturing companies that utilize water in their manufacturing processes. Click to read more at www.rednews.com.

Berkadia Institutional Solutions Arranges Sale and Financing of Multifamily Property in Houston’s Energy Corridor

Posted on by Sarah

Berkadia has arranged the sale and financing of The Dawson, a 354-unit multifamily community in the Energy Corridor, West Houston’s Central Business District. Senior Managing Directors Chris Curry and Todd Marix, Managing Directors Jeffrey Skipworth, Chris Young and Joey Rippel, alongside Director Kyle Whitney of Berkadia Houston represented the seller, RPM Living, a multifamily property management, investment and development company based in Austin, Texas.

Managing Director Clay Akiwenzie of Berkadia Incline Village secured acquisition financing on behalf of the buyer, Bridge Partners, a private real estate investment firm based in Walnut Creek, California. Freddie Mac provided the seven-year, adjustable-rate loan.

Built in 2014 and located at 13411 Briar Forest Dr., The Dawson offers one- and two-bedroom apartments ranging from 649 square feet to 1,552 square feet. Individual units feature wood-style flooring, granite countertops, stainless steel Whirlpool appliances, Bluetooth surround sound, walk-in closets, updated bathrooms, linen and coat closets and private patios or balconies. Community amenities include a modern clubhouse, business center, a two-story fitness center, yoga and spin room, pool, sun deck with lounge chairs, an outdoor kitchen with gas grills, an outdoor fire pit, enclosed dog park, private parking and electric car charging stations.

The Dawson is in walking distance to the third largest employment center in the metro, highly ranked Bush Elementary School and popular Ray Miller Park.